Executive Summary

On February 28, 2026, a joint U.S.-Israeli military operation targeting Iran’s nuclear and military infrastructure triggered the most severe global energy supply disruption since the 1970s oil crisis. Iran responded by effectively closing the Strait of Hormuz, the world’s most critical oil chokepoint, through which approximately one-fifth of global crude oil and liquefied natural gas (LNG) supply normally flows. The International Energy Agency (IEA) has characterized the resulting disruption as the greatest global energy and food security challenge in recorded history.

As of March 25^th, Brent crude was trading at $102 per barrel, representing a more than 42% increase from pre-conflict levels of approximately $72/bbl. The conflict has also driven LNG prices up by nearly 60% and pushed global freight costs sharply higher amid mass suspension of Gulf transit routes by major shipping operators.

For Africa, the implications are asymmetric, structural, and potentially destabilizing. The continent’s 54 economies span a wide spectrum from crude oil exporters (Nigeria, Angola, Congo, Gabon) to heavily import-dependent net fuel consumers (Kenya, Ethiopia, Senegal, Tanzania, Rwanda, and most Sahelian nations). This paper examines the macro-level supply shock, its transmission mechanisms into African economies, the differentiated impact across key country groupings, and the strategic outlook for the continent’s policymakers, investors, and sovereign issuers.

1. The Anatomy of the Strait of Hormuz Closure

1.1 Scale and Precedent

The closure of the Strait of Hormuz following the onset of conflict on February 28, 2026, constitutes the largest oil supply disruption in the history of global energy markets. The Strait, only 21 nautical miles wide at its narrowest point, serves as the transit corridor for more than 20 million barrels of crude oil per day, roughly one-quarter of all oil traded by sea globally. Unlike the sanctions-driven disruptions of 2022 (Russia-Ukraine), the current crisis involves a physical chokepoint: tanker traffic has nearly halted due to Iranian drone and missile attacks on vessels, making diversification and rerouting inadequate substitutes for lost supply.

Iran has launched retaliatory strikes on energy infrastructure across the Gulf, including Saudi Aramco’s Ras Tanura refinery and export terminal, as well as Qatari LNG facilities. Qatar supplies approximately 20% of global LNG. Iraq and Kuwait have curtailed production as onshore storage fills with oil that cannot be exported; the UAE is expected to follow. By mid-March, collective Gulf oil production had fallen by an estimated 10 million barrels per day. Goldman Sachs Research estimates that traders have demanded approximately $14/bbl of geopolitical risk premium above pre-conflict fair-value levels.

1.2 Oil Price Trajectory

Brent crude traded at approximately $72 per barrel on February 27, 2026, the day before U.S.-Israeli strikes commenced. The price progression since then has been dramatic:

2. Transmission Mechanisms into African Economies

The oil price shock reaches African economies through four primary channels:

2.1 Direct Fuel Price Pass-Through

Africa imports the overwhelming majority of the refined petroleum products it consumes. Unlike the production disruption of 2022 where diversification and rerouting buffered some economies, the current crisis involves both higher crude input costs and severe shipping disruptions. War-risk insurance premia reportedly jumped tenfold in some maritime lanes shortly after the conflict began. Major global shipping operators have suspended or rerouted Gulf services, adding 10-15 days to Asia-Europe rotations and significantly raising freight rates.

Fuel is the single most critical direct input into African consumer price indices. In several African economies, energy and transport account for approximately 15-25% of CPI baskets. The 2022 Russia-Ukraine comparison is instructive: rising crude prices and a weakening rand pushed transport fuel prices in South Africa up by more than 25% within six months. The current shock is of greater magnitude and broader geographic reach.

2.2 Currency Depreciation

When global oil prices spike, investors typically move funds into safe-haven assets, primarily the U.S. dollar, at the expense of emerging market currencies. The double effect of higher import costs denominated in USD and a weaker local currency amplifies inflationary pressure for net-importing African economies. This dynamic is already visible in Southern and East Africa, where the rand and the Kenyan shilling have come under pressure. The effect is most severe in economies with already thin FX reserves and high external debt burdens.

2.3 Fertilizer and Food Price Inflation

Oil and gas are not just fuels, they are the feedstocks for nitrogen-based fertilizers (urea, ammonia), which are largely produced in the Gulf and exported globally. The Gulf accounts for approximately 35% of global urea exports, 53% of sulphur, and 64% of ammonia. Morningstar projects that nitrogen fertilizer prices could roughly double because of the current disruption. For African farmers, particularly those preparing for the 2026/27 planting season, this represents a severe cost shock that will translate into higher staple food prices months down the line, well after any potential military ceasefire.

2.4 Gulf Capital Flow Disruption

Perhaps the most underappreciated transmission channel for Africa is the disruption to Gulf sovereign and institutional capital. The UAE, Qatar, and Saudi Arabia have been among the largest deployers of development finance and FDI into African infrastructure, energy projects, and technology through both sovereign wealth funds and bilateral agreements. The destabilization of the Gulf as a financial center poses a credible risk to pipeline capital commitments across Africa, from solar grants and infrastructure financing to direct FDI in manufacturing and digital infrastructure.

3. Country-Level Impact: A Differentiated Landscape

3.1 Oil-Exporting Nations: Windfall Constrained by Structural Vulnerabilities

Africa’s crude oil exporters, notably Nigeria, Angola, Algeria, Libya, Congo-Brazzaville, Gabon, and Equatorial Guinea, stand to benefit in theory from higher prices. However, the structural realities of African oil production significantly constrain this benefit:

• Nigeria exports approximately 1.5 million barrels per day and anchored its 2026 budget on a conservative $60-65/bbl benchmark. Prices above $100 represent a nominal revenue windfall. However, Nigeria remains paradoxically dependent on refined petroleum imports due to inadequate domestic refining capacity. Petrol loading disruptions at the Dangote Refinery (linked to rising crude feedstock costs and FX pressures) have pushed retail pump prices above ₦1,000/liter in multiple states. Nigeria’s annual inflation rate already stands at 15.15% as of December 2025.
• Angola has welcomed stronger crude prices but faces a symmetric challenge: higher import prices for food and essential goods risk eroding export revenue gains. Angola’s 2026 budget was anchored on $61/bbl so the current windfall is real but fragile.
• Congo-Brazzaville and Gabon (both CEMAC members) are in a structurally similar position to Angola. Export revenue gains are partially offset by higher import costs and pass-through inflation. The CEMAC CFA franc’s peg to the euro provides some nominal exchange rate stability, but this does not insulate economies from imported fuel inflation or fertilizer cost increases.
• Algeria and Libya benefit from oil export revenues and have greater domestic refining capacity relative to Sub-Saharan peers, but both face their own political and fiscal vulnerabilities that complicate efficient windfall deployment.

3.2 Net Fuel Importers: Inflation, Currency, and Fiscal Pressure

Most African countries, including most of East Africa, West Africa, and the Sahel, are net importers of refined fuels and face the most direct negative impact:

• South Africa has already confirmed a fuel price increase across all grades. As a regulated-price market where pump prices track Brent and the rand, the shock threatens to delay SARB rate cuts and lift CPI through transport and food channels. The rand has come under pressure as investors seek safe-haven assets.
• Kenya and Tanzania have stated that near-term fuel supplies remain stable but have acknowledged the need for contingency planning. Tanzania has announced a diesel price increase. Both economies face current account widening risk as import bills rise.
• Ethiopia is among the most exposed economies on the continent. It sources most of its refined petroleum from the UAE, Saudi Arabia, and Kuwait, the precise suppliers most affected by the Strait of Hormuz closure. The government has already introduced fuel subsidies to shield households, but fiscal space is severely limited.
• Egypt is in a self-described state of near emergency. As a large energy importer that also depends heavily on Suez Canal revenues, themselves threatened by shipping disruptions, and on remittances from workers in the Gulf, Egypt faces a multi-channel external shock.
• Sahelian economies (Burkina Faso, Niger, Mali) face the gravest humanitarian risk. Limited fiscal capacity, active security crises, and dependence on imported food and fuel create conditions where price shocks can rapidly translate into food insecurity and social instability.
• Djibouti’s finance minister has publicly warned that the conflict will bring severe economic consequences for developing countries, particularly small states dependent on maritime trade.

4. Macroeconomic and Fiscal Implications

4.1 Inflation and Monetary Policy

The IMF had projected easing global inflation in its January 2026 World Economic Outlook. The Iran shock materially reverses that trajectory for Africa. Fuel price increases feed into transport costs, which in turn lift the prices of virtually all goods transported by road (the dominant mode of freight across the continent). Food price inflation follows fertilizer and logistics cost increases with a 2-4 month lag. The World Economic Forum has noted that for fuel- and food-importing states in Africa, the same shock that wealthy nations can absorb through reserves and hedging instruments arrives much more swiftly as higher household prices, fiscal strain, and a greater risk of rationing or social unrest.

For central banks across Sub-Saharan Africa, many of which had begun easing cycles to support growth, the inflation re-acceleration presents a painful dilemma: tighten to anchor inflation expectations and defend currencies or hold to protect fragile growth. Several African central banks are likely to delay planned rate cuts or reverse course, compounding the growth headwinds from higher fuel and food costs.

4.2 Fiscal Balances and Debt Dynamics

Higher fuel prices complicate fiscal balances across multiple dimensions simultaneously. For oil importers, fuel subsidies become more expensive precisely when fiscal revenues are under pressure from broader economic slowdown. For oil exporters, nominal revenue gains may be offset by import inflation, currency effects, and the drag on non-oil economic activity. Debt-ridden African sovereigns face a compounding risk: rising global risk aversion (triggered by the war) has already contributed to wider sovereign spreads and limited market access for sub-investment-grade issuers, even as their financing needs grow.

5. Investment Outlook and Strategic Considerations

5.1 Risks

• Prolonged high oil prices will erode real household incomes across most of Africa, dampening consumer demand and private investment sentiment.
• African airlines heavily reliant on Middle East transit hubs face route disruptions, higher jet fuel costs, and operational uncertainty.
• Gulf capital retrenchment (already beginning as GCC sovereigns manage their own war-related fiscal stresses) could reduce investment flows into African infrastructure and green energy projects at a critical juncture.
• Fragile states face compounding crises as food insecurity and political instability interact with energy cost shocks.
• Rising global interest rates (as central banks respond to inflation) combined with weaker growth will create a debt-refinancing squeeze for African sovereign issuers.

5.2 Opportunities

• African oil exporters with available production capacity and logistics infrastructure have a narrow window to capture premium revenues and build fiscal buffers.
• The crisis accelerates the long-term investment case for African energy self-sufficiency (domestic refining capacity, regional pipeline infrastructure, and renewable energy buildout) to reduce structural import dependence.
• Nigeria’s Dangote Refinery, when operating at full capacity, will be a strategic asset for the continent’s largest economy in precisely the environment this crisis has created.
• Emerging producer nations like Senegal, Kenya, Uganda, and Namibia gain strategic rationale to accelerate their production ramp-up, with improved economics for in-development projects.
• The disruption to Gulf LNG supplies will generate demand for alternative energy infrastructure investment opportunities across Africa for developers, financiers, and EPC contractors.

5.3 CEMAC-Specific Outlook

Within the CEMAC zone, the picture is mixed but tilts marginally positive for sovereign fiscal positions in the near term given the dominance of oil in the export mix of Congo-Brazzaville, Gabon, Equatorial Guinea, and Chad. The CFA franc’s peg to the euro provides exchange rate stability that insulates the zone from some of the currency depreciation dynamics seen in floating-currency African economies. However, CEMAC economies face secondary pressures through imported food and consumer goods inflation, elevated freight costs, and potential Gulf FDI retrenchment. Cameroon, which is both a minor oil producer and a significant agricultural and transit economy, faces a nuanced exposure: modest export revenue benefit on the petroleum side, counterbalanced by import cost inflation and freight disruption affecting its role as a regional trade hub for the Central African region.

6. Scenarios and Outlook

As of March 25, 2026, about four weeks into the conflict, oil prices remain above $100/bbl with no credible de-escalation agreement in sight. The base case at the time of writing is an extended conflict scenario, with meaningful tail risk of further escalation. Chatham House economists estimate that a scenario in which the conflict persists for several months could see oil prices reach approximately $130/bbl before declining in H2 2026, with the euro-zone contracting and the U.S. experiencing a meaningful growth slowdown.

7. Conclusion

The 2026 Iran Conflict is not just another commodity cycle. It is a stress test of Africa’s energy architecture, exposing how deeply petrol pricing, fiscal stability, and external balances remain tethered to imported fuel. With Brent holding above $100/bbl and supply routes still unstable, the window for passive observation has closed; governments are now operating in a live shock environment that demands rapid recalibration

Fiscal authorities should move immediately to re-anchor their frameworks around a higher and more volatile oil regime, embedding downside scenarios into budget assumptions and explicitly linking fuel pricing, subsidy exposure, and FX reserve trajectories. The priority is not simply adjustment, but insulation: replacing universal subsidies with targeted support mechanisms, while ensuring importers retain access to liquidity through reinforced trade finance channels. At the regional level, fragmentation will be costly. Coordinated responses through blocs such as CEMAC and ECOWAS can improve bargaining power on supply, financing, and external support.

Monetary authorities face a narrower margin for error. Pre-emptive engagement with multilateral buffers is preferable to reactive stabilization under pressure, particularly for currency regimes with limited flexibility. In parallel, supply-side actors like refiners, import agencies, and logistics operators must secure continuity through diversified routing, pre-arranged insurance structures, and forward procurement strategies that anticipate tightening energy and fertilizer markets.

For the private sector, the implications are balance-sheet driven. Firms exposed to fuel and freight costs must reprice risk, extend working capital horizons, and reassess covenant resilience under prolonged cost inflation. Those with dollar liabilities and local currency revenues should prioritize hedging strategies before volatility deepens. In project finance, sponsors should revisit base cases and engage capital providers early, while optionality still exists.

Ultimately, the more important takeaway lies beyond the current disruption. Africa’s repeated vulnerability to external oil shocks reflects structural gaps like limited refining capacity, shallow domestic capital markets, and chronic underinvestment in energy systems. Large-scale projects such as the Dangote Refinery illustrate what is possible when capital, policy, and execution align. Replicating and financing such infrastructure at scale is no longer a strategic ambition; it is a macroeconomic necessity. The end of this conflict will not remove the underlying exposure, only deliberate structural change will.

Produced BY:

Tiara Njamfa – Sr. Associate, Advisory & Capital Markets

tiara.njamfa@bekocapital.com

+ 237 694 30 84 55

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This research paper has been prepared by the Beko Capital Advisory Investment Banking Division for informational purposes only and does not constitute investment advice, a solicitation, or an offer to buy or sell any security or financial instrument. The views expressed are based on publicly available information as of the date of publication (March 25, 2026) and are subject to change without notice. Past performance is not indicative of future results. Recipients should conduct their own independent analysis and consult qualified advisers before making any investment or financial decision. This document is intended solely for the use of its authorized recipients. To the fullest extent permitted by applicable law, Beko Capital Advisory disclaims any and all liability for any direct, indirect, incidental, or consequential loss or damage arising from any use of, or reliance on, this document or its contents. No warranty is given, and no responsibility is accepted, regarding the standing of any individual, firm, company, or other organization mentioned herein.

Key sources referenced in this paper include: IEA, Goldman Sachs Research, Dallas Federal Reserve, Chatham House, World Economic Forum, African Energy Chamber, ODI, Al Jazeera, Reuters, Wits University, Financial Afrik, and AP.

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